Tuesday, May 16, 2017

Not a Pickoff Move.

Schoshinski v. City of L.A., No. B269431 (D2d8 Mar. 14, 2017)

There are two class actions against a City for utility overcharging. Case #1 settles, with City agreeing to pay full refunds of the contested fees and other injunctive relief. The class rep in Case #2 didn’t opt out of Case #1 and received the refunds. The city successfully got him out on summary judgment on mootness grounds, but the court permitted amendment to add new reps. The new reps, however, had also received refunds under the Case #1 settlement. The trial court again granted SJ, and the new reps appeal.

The new reps argue that their claims aren’t moot because they didn’t get full relief and that even if they did, a prudential exception that prevents a defendant from “picking off” class reps on mootness grounds. But the Court of Appeal doesn’t agree.

The claims of a plaintiff become moot when there remains no effectual relief for the court to grant. That is generally true of class reps as well as ordinary plaintiffs. Here, the record was clear that the new reps got full refunds for the fees they paid under the terms of the Case #1 settlement. The Case #1 settlement also provided essentially the injunctive relief sought in Case #2. Case #2 did ask for some
marginally additional administrative relief, such as ongoing accounting and auditing to assess the overcharges. But since the settlement required City to stop assessing the charge and to fully reimburse those overcharged, that relief was not meaningful, given that the full relief for the harm alleged in both lawsuits was fully afforded, different administrative details notwithstanding. 

Moreover, the equitable “pickoff” exception didn’t apply. The relief the reps got under the Case #1 settlement wasn’t addressed to them individually, but to the Case #1 class (which was basically the same as the Case #2 class) as a whole.  Nor was the settlement a purely voluntary act by the City—is was formally approved by the court, entered as a judgment and subject to ongoing jurisdiction under Code of Civil Procedure § 664.6. Those facts make the case entirely different from the typical “pick off” scenario, where a defendant seeks to avoid class-wide liability by voluntarily and unilaterally offering to make only a named plaintiff whole, albeit generally with the anticipation that no other plaintiff will stand up to serve as a new rep. 

As the court usefully explains the doctrine:

[E]vidence of a defense motive to avoid class litigation is [not] the touchstone of the pick off exception.  The critical issues are whether the defendant’s actions are voluntary, rather than compulsory, and whether the relief provided is to the plaintiff alone or to the entire class the plaintiff seeks to represent.

N.B.: It seems to me like this case could have been more straightforwardly resolved as a matter of res judicata, as opposed to mootness. Even under the goofy primary rights doctrine, there can be little doubt that Case #1 settlement addressed the exact same injuries as raised in Case #2. And since the new reps did not opt out, it doesn’t seem too controversial to say they should be bound to the Case #1 judgment. That apparently was what the trial court held, but for whatever reason, the parties failed to litigate the issue on those grounds in the Court of Appeal.

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